Welcome to Glossy’s Beauty and Wellness Briefing. This exclusive and inside look at the beauty and wellness industries is meant to dig into the topics that really matter and shed light on the elephants in the room. Sign up here to get the briefing delivered to your inbox every Wednesday.
In 2016, when Melanie Simon and David Mason launched their Ziip skin-care device, which treats a host of skin issues and syncs with an online app, Amazon was not top of mind. The at-home tool retails for $495, and the corresponding Golden and Silver gels said to guide its electrical current facials are $129 and $50, respectively. The duo chose to sell on their DTC site, Ziipbeauty.com, and select luxury retailers like Net-a-Porter, Barneys and Neiman Marcus.
“Amazon Luxury Beauty has approached us many times over the prior two years, but we haven’t felt ready to jump into the platform,” said Mason. “We’ve heard stories from other brands about the huge amount of work it takes to do it right.”
However, in late 2018, Ziip set up shop in Amazon’s marketplace and is now featured in Amazon’s Indie Beauty shop, which debuted last summer.
“Of course, DTC sales from our website are an important part of our business model, but some people prefer to shop in a physical store, on a specialized e-commerce site or on Amazon,” Mason said. “We want the purchase experience to be just right for each person and not push them away from where their eyes and minds prefer to be.”
Ziip’s willingness to be on Amazon represents the growing shift among prestige and professional brands to consider the site, after years of resisting its lures.
“It’s historically been a branding perception problem,” said Kiri Masters, CEO and founder of Bobsled Marketing. “Prestige and professional brands don’t want to be in a mass market channel with no differentiation. They rested on their laurels and relied on their other distribution channels, but guess what, Sephora sales are down, and shoppers prefer to shop on Amazon versus third-party sites.”
Once Amazon’s beauty category was quietly ungated in the summer of 2017, premium brands have had to find their footing on the site, said Masters. It’s been a struggle, she said, as brands are not sure if they should enter a first-party relationship, where Amazon has more control over pricing and, obviously, takes down resellers, or go the marketplace route, where brands are largely left to their own devices. One beauty CEO, who asked to remain anonymous, said though a third-party marketplace relationship gives brands more ownership, products don’t move because resellers are still offering slashed prices.
Ziip has gone the route of the marketplace in order to have more control over pricing, inventory and communications — it enlisted the help of Amazon agency Envision Horizons to manage daily advertising and shipping issues.
Prestige hair brand Virtue Labs will be debuting on Amazon Luxury Beauty through a first-party relationship in the second or third quarter of this year. Virtue Labs’ shampoos, conditioners and masks sell at a premium — they retail for $15 to $86 — and until now, it has relied on luxury channels like Net-a-Porter, as well as salon distribution. However, shoppers could find it on Amazon, sold by reseller BlueMercury, off and on since June 2018.
“We’ve had the channel conflict issue for years. If you sold at one prestige player like Sephora, they wouldn’t let you sell at Ulta. But the reality is that, with the rise of digital and social, it is hard to control who sells your product and where they sell it,” said Melisse Shaban, Virtue Labs founder and CEO.
“We know Luxury Beauty can help the reseller problem, where the product, price and even content don’t look the way they are supposed to,” she said. “The way I’ll support all of my channels is that I will go up in price on Amazon to account for the convenience and one-day shipping. That way, I can protect the salons and Sephora, which will all be priced the same. Unique pricing has to be accounted for to sell on Amazon.”
Unlike Ziip and Virtue Labs — premium brands that only came to market within the last three years and see digital as part of their DNA — Eufora International, which launched in 1997, is decidedly in another camp. “Salons are our preferred channel of distribution,” said Beth Bewley, co-founder and CEO of Eufora International. The brand’s hero products, which retail for $21.50 to $138.50, can be found in over 1,000 partners across North America. In 2018, Eufora saw double-digit sales growth, according to Bewley.
To deal with Amazon resellers, Bewley created an in-house team of 10 to track the inventory that goes missing from salons and the customers buying from salons and, subsequently, selling on Amazon. Eufora also launched a DTC site, Eufora.net, in January to deal with the customers’ requests for convenience.
“Amazon works hard to ensure all communication is done through their platform, and direct connections are not made unless you partner with them, so it has been an uphill battle,” she said. Though Eufora has made its anti-Amazon stance clear, Bewley was contacted by Amazon this month to enroll in its Brand Registry service, which helps brands fight against fake product and resellers with the site’s support. “They know I don’t want to sell there, but they continue to make attempts to get me to engage,” she said. “I’m holding out.”
Though it doesn’t seem likely Bewley will be making any concessions soon, for other prestige players, the genie is largely out of the bottle. “We have to rise to the occasion and think omni-channel,” said Robert Schaeffler, Devacurl CEO. Devacurl has yet to sell on Amazon in an official capacity. The brand can be found through Amazon resellers, and Schaeffler said the company is weighing Amazon as an option, asides from salons and Sephora stores in the U.S.
Though Ziip’s approach to Amazon is still in its nascent phases. Mason sees content as a way to cut through the clutter on the mass channel. He and one other employee strategize around Ziip’s content and performance, in partnership with Envision Horizons weekly. Amazon’s Enhanced Brand Content page, which allows brands to control product descriptions and imagery, has been an focus. “We rotate that monthly, with images coming in that showcase new user-generated before-and-after photos, press and awards,” said Mason, who noted an uptick in conversion after implementing UGC, but declined to state specifics.
Founder and CEO Simon will also be featured in an upcoming Amazon Live session, where she will be talking about Ziip, à la Instagram Stories or YouTube. “We love this live format in other channels and think this is another way to get to ‘talk’ to customers,” he said. “It’s how we can connect and build that long-term relationship.” —Priya Rao, beauty editor